PC sees red at ACCC’s green light to Optus

Productivity Commission chairman
Gary Banks
has slammed the competition regulator’s decision to give the go-ahead to Optus’s $800 million deal to close its cable network and shift customers on to the national broadband network.

The Australian Competition and Consumer Commission said approval for the deal, given this month, had been “finely balanced" and had public benefits that were “clear and quantifiable".

But Mr Banks said the authorisation, as well as an earlier backing for
Telstra
’s agreement to disconnect customers from its copper network and transfer them to the NBN, was generating “multiple competition issues".

Total payments from the two agreements were expected to reach $12 billion, Mr Banks said.

“This follows a long history of competition problems in the telecommunications sector that illustrate how failure to address structural matters at the right time can leave a costly legacy and pose major challenges for public policy in the future," he said.

The comments are likely to reignite debate about Canberra’s refusal to conduct a proper cost-benefit analysis of the NBN.

The Optus deal, in theory, removed the last potential rival to the nascent fixed-line monopoly.

The ACCC’s decision sparked fierce criticism from opposition communications spokesman
Malcolm Turnbull
, who described it as a “a very black day for the ACCC" and “the very pinnacle of anti-competitive behaviour".

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Mr Banks hinted that the ACCC’s approval had been influenced by government policy to deliver an NBN and its desire to unscramble “the Telstra structural egg".

“The superiority on cost-benefit grounds of the underlying approach to delivering broadband services remains to be publicly verified," Mr Banks said. His remarks, delivered at a conference in Brisbane, were posted on the commission’s website on Friday.